21. LHU Corporation makes and sells a product called Product WZ. Each unit of Pr

Question

21.

LHU Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.3 hours of direct labor at the rate of $19.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.

  
The budgeted direct labor cost per unit of Product WZ would be:

24.

Sparks Corporation has a cash balance of $14,100 on April 1. The company must maintain a minimum cash balance of $11,500. During April, expected cash receipts are $59,000. Cash disbursements during the month are expected to total $68,500. Ignoring interest payments, during April the company will need to borrow:

25.

Monson Corporation has two products: G and P. The company uses activity-based costing and has prepared the following analysis showing the total cost and activity for each of its three activity cost pools:

Spendlove Corporation has provided the following data from its activity-based costing system:

Spendlove Corporation has provided the following data from ts activity-based costing system: Total Cost $1,660,260 $69,455.70 Activity Cost Pool Total Activity Assembly 59,000 machine-hours Processing orders 2,290 orders Inspection Inspection-hours The company makes 780 units of product S78N a year, requiring a total of 1,140 machine-hours, 64 orders, and 36 Inspection-hours per year. The product's direct materlals cost is $58.21 per unit and Its direct labor cost is $14.69 per unit The product sells for $124.00 per unit. According to the activity-based costing system, the product margin for product S78N Is: (Round your intermediate calculations to 2 decimal places.) O $5.265.60 o $5,83728 O $39,858.00 O $3,324.48

Explanation / Answer

1 Activity Cost Driver Cost Total Activity Cost per Driver Assembly 1660260 59000 28.14 Processing Orders 69455.7 2290 30.33 Inspection 126338 1810 69.8 Statement Showing Product Margin Amount in $ Sale Value 96720 ($124 x 780 units) Less : Direct material (780 unit x 58.21) -45403.8 Direct Labour (780 unit x 14.69) -11458.2 Assembly cost (1140 machine Hours x 28.14) -32079.6 Processing orders (64 orders x 30.33) -1941.12 Inspection (36 inspection x 69.8) -2512.8 Product Margin 3324.48 Option (D) is Correct Answer 2 1 unit of WZ = 2.3 Hour Direct labour cost Per Hour = $19 So, direct cost per unit of product Z = 2.3 Hour x $19 = 43.7 $43.7 Per Unit 3 $ Beginning Cash balance 14100 (+) Expected Cash received 59000 73100 Less : Cash Disbursements -68500 4600 Add : Borrowings Taken 6900 Minimum Cash Balance 11500 Company will need to Borrow $6,900 4 Activity Cost pools Total Cost Total Activity Activity Rate (A) (B) (A/B) Activity 1 60375 1150 52.5 Activity 2 37925 2050 18.5 Activity 3 46107 4150               11.11 So, Activity rate under activity based costing system for activity 2 is closest to $ 18.5. Therefore, Option (A) is Correct.

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